The Associated Press reports that a new study from Hewitt Associates found that base pay will climb only by an average of 3.8% in 2009. However, performance-based payments are expected to climb.
A study released Tuesday by Hewitt Associates, a human resources consulting firm, found base pay will rise by 3.8 percent in 2009, marking the seventh consecutive year of flat growth.
One-time performance-based pay, however, is expected to grow by 10.6 percent. That's down slightly from 10.8 percent this year and 11.8 percent in 2007.
Performance-based rewards are popular since they don't commit companies to ongoing costs, said Ken Abosch, leader of Hewitt's compensation consulting business. The survey measured one-time performance-based awards and did not include raises based on performance.
"Most of the compensation growth today comes from (one-time merit-based) pay - it accounts for almost three-quarters of the increase," he said.
Wages have barely been keeping ahead of inflation over the past several years and earlier this year inflation overtook wage increases. A post on a New York Times blog shows that earlier this year wages were not keeping up with inflation for many employees meaning employees were actually taking home less pay.
